Olympic Retail Users Taking Early Look At LA

The world’s best athletes aren’t the only ones preparing for the 2028 Olympic and Paralympic Games. The Los Angeles real estate community is also gearing up as global brands, national sponsors and international delegations quietly shop for storefronts nearly two years before the opening ceremony. 

Los Angeles retail rents are poised to grow after a period of post-pandemic recovery, creating a backdrop that’s helping to fuel early interest from brands and international delegations scouting space for use in 2028.

“Demand is strong because tenants recognize that there is a limited window to enter the market at today’s economics,” said Daniel Negari, who owns properties on Third Street Promenade in Santa Monica.

An undisclosed country attending the Olympics is in negotiations to lease 15K SF of retail space at Third Street Promenade for a hospitality house that will start as a pop-up but will occupy the spot for a more traditional, long-term lease period, Negari told Bisnow in an email.

Hospitality houses are cultural and social hubs maintained during the Games by visiting countries for use by visitors, families and athletes.

During the Olympics, part of the building will serve as the country’s “official hospitality and delegation hub, with space for its ambassador, government representatives and invited guests,” Negari said in an email. 

After the Olympics, that part of the building would transition to non-Games-related uses, including coworking, cultural programming and event space. 

“The Olympics are the catalyst for the opening, but they are not the entire business plan,” Negari said. 

Retail rents in LA reached $2.93 per SF in the second quarter, according to CBRE. They are expected to continue to rise.

The city’s recent boost in visitors and hotel occupancy related to the World Cup is also propelling advance interest as the Olympics approach.

“The World Cup generated so much positive momentum and sentiment here locally and nationally, and I really believe it painted a far more positive picture of Los Angeles than some news outlets nationally, internationally communicated,” CBRE Managing Director Jessica Lall said. 

Los Angeles’ streets came alive for enormous public World Cup watch parties across the city when the region hosted eight matches at Inglewood’s SoFi Stadium earlier this year. 

Downtown LA’s streets were packed with jersey-wearing soccer fans on a crawl between bars, fan zones, hospitality houses and enterprising food and beverage businesses that turned on their TVs to the games. When the tournament wrapped, the verdict was that the city had put on its best face. 

Since the World Cup, Olympic-related interest in retail space has picked up, Lall said.

CBRE is seeing interest from a range of consumer brands, especially those in the soft goods sector, that are looking to lease space for terms of approximately three years to be in place for the lead-up to and duration of the Olympics, CBRE Research told Bisnow in an email. 

For retail activations, brands are typically looking for spaces approximately 5K SF, but delegations from countries sending athletes to the Games are looking in the 20K SF to 30K SF range for pop-ups with lease terms of approximately three months, CBRE Research said. 

Retailers are scoping out space in Beverly Hills and Venice’s Abbot Kinney neighborhood, according to CBRE. The firm also mentioned Third Street Promenade. 

Activity is just beginning to ramp up, Negari said. 

The amount of interest Negari is seeing, on top of other indicators of Third Street Promenade’s health, gives him optimism about what’s to come. Foot traffic at the Promenade is approximately 80% of 2019 traffic levels, and on the weekends is exceeding 2019 levels, Negari said. 

“For Third Street Promenade specifically, the combination of international exposure, increased visitation and renewed brand interest can create benefits that last well beyond the Games,” Negari said.